Registered number: 12758732 # **ASHINGTON INNOVATION PLC** **FINANCIAL STATEMENTS** **FOR THE PERIOD ENDED 31 DECEMBER 2023** # ASHINGTON INNOVATION PLC # COMPANY INFORMATION # Directors C L Disspain (resigned 8 November 2023) P E Presland J Smart J K Drummond (resigned 15 August 2023) G Duthie (appointed 12 October 2023) D D Nauth (appointed 8 November 2023) R J Paolone (appointed 8 November 2023) # Company secretary MSP Corporate Services # Registered number 12758732 # Registered office 27/28 Eastcastle Street London W1W 8DH # Independent auditors MHA Building 4 Foundation Park Roxborough Way Maidenhead SL6 3UD # Accountants Venthams Ltd Millhouse 32-38 East Street Rochford Essex SS4 1DB # Legal advisers Fladgate LLP 16 Great Queen Street London WC2B 5DG # ASHINGTON INNOVATION PLC # CONTENTS | | Page | | --- | --- | | Strategic report | 1 - 3 | | Governance report | 4 | | Directors' report | 5 - 7 | | Directors' remuneration report | 8 - 10 | | Directors' responsibilities statement | 11 | | Independent auditors' report | 12 – 17 | | Statement of comprehensive income | 18 | | Statement of financial position | 19 | | Statement of changes in equity | 20 | | Statement of cash flows | 21 | | Notes to the financial statements | 22 – 34 | # ---## ASHINGTON INNOVATION PLC ### STRATEGIC REPORT FOR THE PERIOD ENDED 31 DECEMBER 2023--- #### Introduction The Directors present their report and financial statements for the period ended 31 December 2023. #### Business review Ashington Innovation PLC is a Special Purpose Acquisition Company (SPAC). On the 06 June 2023 the Company obtained FCA approval for the listing of its shares on the Main Market of the London Stock Exchange, Standard Segment. The Company also obtained a dual listing on the Frankfurt Stock Exchange in August 2023. The Company's objective is to generate an attractive rate of return for shareholders, predominantly through capital appreciation, by taking advantage of opportunities to acquire companies or businesses in the technology sector and to operate those that it acquires. The Directors are responsible for carrying out this objective, implementing the Company's business strategy and conducting its overall supervision. The Company may seek to simultaneously acquire more than one business that have complementary people and technology in order to create one larger company. During the period the Company had entered into non-binding Heads of Terms to make its first acquisition. However, the Directors decided to withdraw from the acquisition process due to specific circumstances that made the transaction unviable. The Company's shares were suspended from trading on 17 August 2023 following the announcement of the proposed reverse takeover. Following the termination of the proposed reverse take-over the Company made an application to the FCA to request the suspension of the trading of ordinary shares be lifted. On 25 January 2024 a Notice of restoration of listing from the official list was issued that restored the Ordinary shares of the Company to the Official List on that date. As at the date of this Annual Report, the Company has not identified any other specific acquisition targets into which negotiations have been entered. The Company continues to actively seek a suitable acquisition target and the intention remains to acquire a controlling interest in target business(es) or company(ies). Whilst the Company continues to review a broad range of acquisition opportunities, once the Company carries out an acquisition in a specific sector, it intends to focus its activities on that sector and to build its strategy in that sector. The Directors do not intend the enlarged group to become a holding company for projects in multiple sectors or to become an investment fund. The Company will not, therefore, be pursuing a strategy or policy of diversification and spreading risk in its acquisitions. The Directors' intention is to create a trading business, rather than an investment entity. The Directors consider the potential vendors of target companies or businesses will be attracted by the opportunity to hold an interest in a London listed company with cash, access to capital markets and the know how to develop the business. On 08 December 2023 there was an issue of shares to a former director in lieu of debt. Jason Drummond, who resigned as a Director on 15 August 2023, was issued 1,200,000 Ordinary £0.01 shares at a premium of £0.02 per share in lieu of monies owed to him at the date of issue. #### Environmental Responsibility The Company believe that any matters related to environmental responsibility are not currently applicable as there are no operating activities. Nevertheless, the Company recognise the importance of environmental responsibility and will always comply with local regulatory environmental requirements in the event where future operational activities occur. #### Social, community and human rights responsibility The Company recognise the responsibility towards partners, suppliers, investors, lenders and the local community in which future operational activities will take place. Currently the Company has no employees other than Directors. All Directors of the Company are male. ---Page 1 # ---**ASHINGTON INNOVATION PLC** **STRATEGIC REPORT (CONTINUED)** **FOR THE PERIOD ENDED 31 DECEMBER 2023**--- # **Financial key performance indicators** The Company is a new entity with limited operating history and has only become a listed entity in the current period. Despite no acquisition yet having been completed, the Company has incurred expenditure and therefore the only current key performance indicator is the expenditure incurred for the period. The Company operates in an uncertain environment and is therefore subject to a number of different risk factors. The Directors have performed an assessment of the different risks and consider the following risk factors to be the most relevant to the Company. # **Principal risks and uncertainties** # **Transaction risk** The Company's placing shares were issued at a premium to the net asset value of the Ordinary Shares. In addition, the Company has limited cash resources which will diminish over time owing to the Company's operating costs, particularly in the period before an acquisition is completed. The Company may be unable to obtain sufficient financing, if required, to complete an acquisition or fund the target's operations or may not be able to obtain such financing on terms acceptable to the Company. The Company is dependent on the Directors to identify suitable acquisition opportunities. Whilst the Directors have considerable relevant experience of acquiring companies, businesses and assets in the nature of those that the Company will seek to acquire, there is a risk that the Directors may not be able to source suitable targets or execute an acquisition, and that any targets identified may not fully align with the Company's objectives and business plans. # **Economic uncertainties** The global financial markets are experiencing continued volatility and geopolitical issues and tensions continue to arise. Many countries have continued to experience recession or negligible growth rates, which have had, and may continue to have, an adverse effect on consumer and business confidence. The resulting low consumer and business confidence has led to low levels of demand for many products across a wide variety of industries. The Company cannot predict the severity or extent of these recessions and/or periods of slow growth. Accordingly, the Company's estimate of the results of operations, financial condition and prospects of an acquisition target will be uncertain and may be adversely impacted by unfavourable general global, regional and national macroeconomic conditions. # **Going Concern** As at 31 December 2023, the Company had cash at bank of £323,146, but made a loss for the period ended at that date of £878,218 and has an accumulated deficit on the statement of comprehensive income of £1,273,524. The Company was established as a Special Purpose Acquisition Company and during the period it successfully listed on the Main Market of the London Stock Exchange. The Company is unlikely to make any profit until the completion of a suitable acquisition. Further funding is required under the Company's long-term plan to continue to seek acquisition candidates, and the Company plans to raise significant further equity capital either from existing or new investors. However, the plans to raise additional equity capital from existing and new shareholders, and the successful completion of a suitable acquisition are matters that are not entirely within the control of the Directors, and represent material uncertainties regarding the Company's ability to continue as a going concern. The Directors have a reasonable expectation that the Company has adequate resources or access to further capital to continue in operational existence for the foreseeable future and for this reason will continue to adopt the going concern basis in the preparation of its financial statements. As referred to in Accounting Policy 2.2 Going Concern, the Directors believe that the adoption of the going concern basis of accounting is appropriate. The accompanying financial statements do not include any adjustments that would be required if they were not prepared on a going concern basis. ---Page 2 # ASHINGTON INNOVATION PLC # STRATEGIC REPORT (CONTINUED) # FOR THE PERIOD ENDED 31 DECEMBER 2023 # Other key performance indicators As above, the Company is still seeking a suitable acquisition and this remains the primary focus of the Directors, who do not consider there to be any other key performance indicators at present. The Directors of the Company believe that, having regard to the nature of the Company's business, there is no information relating to environmental and employee matters that are considered key non-financial performance indicators. # Directors' statement of compliance with duty to promote the success of the Company During the period, the Directors have acted to promote the success of the Company for the benefit of its members. While discharging their duties, section 172 (1) requires the Directors to have regard to, amongst other matters, the: Likely long-term consequences Business relationships with suppliers - Impact on the community and environment - Reputation for high standard of business conduct - Need to act fairly between members of the Company The Directors are responsible for the Company's objectives and business strategy and its overall supervision. Acquisition, divestment, and other strategic decisions will all be considered and determined by the Directors. The Directors have focussed long-term strategic objectives and therefore are clear on the potential long-term consequences of not meeting these objectives. The Directors have good working relationships with existing suppliers and through their considerable combined experience and high standards of business conduct they will continue to foster the existing and new relationships with suppliers, members and the local community in order to continue to promote the success of the Company. The Directors have and will continue to provide leadership within a framework of appropriate and effective controls. The Directors operate and monitor the corporate governance values of the Company and have overall responsibility for setting the Company's strategic aims, defining the business objective, managing the financial and operational resources of the Company, and reviewing the performance of the officers and management of the Company's business both prior to and following an acquisition. This report was approved by the board and signed on its behalf. Peter Presland Peter Presland (Apr 30, 2024 16:04 GMT+1) P E Presland Director Date 30/04/2024 Page 3 # ASHINGTON INNOVATION PLC # GOVERNANCE REPORT # FOR THE PERIOD ENDED 31 DECEMBER 2023 The Company is committed to high standards of Corporate Governance and is headed by an effective Board which is collectively responsible for the long-term success of the Company. As a company with a London Stock Exchange Main Market Standard Listing, the Company is not required to comply with the provisions of the UK Corporate Governance Code. However, in the interests of observing best practice on corporate governance, the Company intends to comply with the provisions of the UK Corporate Governance Code (as published by the Financial Reporting Council) insofar as is appropriate having regard to the size and nature of the Company and the size and composition of the Board, except that: - given the size of the Board and the Company's current non-operational status, the Company does not comply with certain provisions of the UK Corporate Governance Code (in particular the provisions relating to the composition of the Board and the division of responsibilities between the Chairman and Chief Executive and executive compensation), as the Board considers these provisions to be inapplicable to the Company at its current stage; - until an acquisition is made, the Company will not have separate audit and risk, nomination or remuneration committees. The Board as a whole will instead review audit and risk matters, as well as the Board's size, structure and composition and the scale and structure of the Directors' fees, taking into account the interests of shareholders and the performance of the Company, and will take responsibility for the appointment of auditors and payment of their audit fee, monitor and review the integrity of the Company's financial statements and take responsibility for any formal announcements on the Company's financial performance. Following the completion of an acquisition, the Board intends to put in place audit and risk, nomination and remuneration committees; - the UK Corporate Governance Code recommends the submission of all Directors for re-election at regular intervals. None of the Directors will be required to be submitted for re-election until the first annual general meeting of the Company following an acquisition; and - the Company does comply with the provision of the UK Corporate Governance Code in that at least half of the Board, excluding the Chairman, should comprise non-executive directors determined by the Board to be independent. The Board considers Messrs Duthie, Nauth and Paolone to be independent non-executive directors. However, the Company has not appointed a senior independent director. The Company intends to appoint additional independent non-executive directors, including a senior independent director, following an acquisition so that the Company complies with these provisions. The Company has adopted MAR-compliant policies regarding Directors' dealings. The Company will not seek shareholder approval at a general meeting in respect of an acquisition, unless required to do so for the purposes of facilitating the financing arrangements or for other legal or regulatory reasons. This report was approved by the board and signed on its behalf. Peter Presland Peter Presland (Apr 30, 2024 16:04 GMT+1) P E Presland Director Date: 30/04/2024 Page 4 # ASHINGTON INNOVATION PLC # DIRECTORS REPORT FOR THE PERIOD ENDED 31 DECEMBER 2023 The Directors present their report and the financial statements for the period ended 31 December 2023. # Principal activity The principal activity of the Company is that of a Special Purpose Acquisition Company. # Results and dividends The loss for the 17 month period, after taxation, amounted to £878,218 (2022 - loss for the 12 month period amounted to £381,450). The directors have not recommended a dividend in respect of the current period and no dividend was recommended or declared in the prior year. # Political contributions The Company made no political contributions in respect of the current period and none were made in respect of the prior year. # Directors The Directors who served during the period were: - C L Disspain (resigned 8 November 2023) - P E Presland - J Smart - J K Drummond (resigned 15 August 2023) - G Duthie (appointed 12 October 2023) - D D Nauth (appointed 8 November 2023) - R J Paolone (appointed 8 November 2023) # Directors' indemnities and liability insurance The Company maintains liability insurance for its Directors and Officers. The Company has also granted indemnities to the extent permitted by law to each of the Directors. These indemnities are uncapped in amount in relation to certain losses and liabilities which they may incur to third parties in the course of acting as a Director or Officer of the Company. Neither the indemnity, nor insurance cover provides cover in the event a Director or Officer is proved to have acted fraudulently or dishonestly. The indemnity is categorised as a 'qualifying third-party indemnity' for the purposes of the Companies Act 2006 and will continue in force for the benefit of Directors and Officers on an ongoing basis. # Share Capital Ashington Innovation Plc is incorporated as a public limited company and is registered in England and Wales with the registered number 12758732. Details of the Company's issued share capital, together with details of movements during the year, are shown in Note 10. The Company has one class of Ordinary shares and all shares have equal voting rights and rank pari passu for the distribution of dividends and repayment of capital. Page 5 # ASHINGTON INNOVATION PLC # DIRECTORS REPORT (CONTINUED) # FOR THE PERIOD ENDED 31 DECEMBER 2023 At 31 May 2023 the Company entered into an arrangement to issue warrants to the Directors. The fair value of the warrants were as follows; | Director | Fair Value of Warrants at 31 May 2023 £ | Fair Value of Warrants at 31 December 2023 £ | | --- | --- | --- | | Jason Smart | £183,061 | £184,370 | | Jason Drummond | £1,391 | - | | Chris Disspain | £1,391 | £1,400 | | Peter Presland | £1,391 | £1,400 | | Total | £187,234 | £187,170 | In addition to the table above there were Senior Manager warrants issued with a fair value of £8,617 as at 31 May 2023 and £8,681 as at 31 December 2023. The total fair value of all warrants was £195,851 as included in Note 14 to the accounts. The number of unissued shares that the warrants would take up is not known. # Significant Shareholders As at 31 December 2023, so far as the Directors are aware, the parties (other than Directors) who are directly or indirectly interested in 3% or more of the nominal value of the Company's share capital is as follows: | Shareholder | Number of Ordinary Shares | Percentage of Issued Share Capital | | --- | --- | --- | | Mr Mohammed Bakhashwain | 7,833,333 | 12.51% | | Bank of New York Nominees Limited | 3,833,333 | 6.12% | | Edward Johnson | 3,333,333 | 5.32% | | Michael Nunn | 3,333,333 | 5.32% | | Peter Gaynor | 3,333,333 | 5.32% | The Directors who directly or indirectly have an interest in the nominal value of the Company are shown in the Directors' Remuneration Report on page 9. # Future developments As referred to in the Strategic Report, the Company, following the successful listing of its shares on the Main Market of the London Stock Exchange, is actively looking for suitable acquisition targets. # Disclosure of information to auditors Each of the persons who are Directors at the time when this directors' report is approved has confirmed that: so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information. Page 6 # ASHINGTON INNOVATION PLC # DIRECTORS REPORT (CONTINUED) # FOR THE PERIOD ENDED 31 DECEMBER 2023 # Greenhouse gas emissions, energy consumption and energy efficiency As the Company has not completed its first acquisition and has only five Directors, limited travel premises, the Directors do not consider any disclosure under the Task Force on Climate-related Fi Disclosures is required at this juncture, however the Company will continue to review this position executes its investment and acquisition strategy. # Post year end events There have been no significant events affecting the Company since the period end. # Auditors The auditors of the Company for the year ended 31 July 2022 were Venthams Limited. On 31 July 2023, Venthams Limited resigned as auditor of the Company and the Board of Directors approved the appointment of MHA as statutory auditor of the Company, and this takes effect from and including the 31 December 2023 period end. The auditors, MHA, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. This report was approved by the board and signed on its behalf. Peter Presland Peter Presland (Apr 30, 2024 16:04 GMT+1) P E Presland Director Date 30/04/2024 Page 7 # ASHINGTON INNOVATION PLC # DIRECTORS REMUNERATION REPORT FOR THE PERIOD ENDED 31 DECEMBER 2023 # Introduction The information included in this report is not subject to audit other than where specifically indicated. # Remuneration Committee The Company does not have an appointed Remuneration Committee though the Board intends to put one in place following the completion of an acquisition. The Board as a whole will instead review the Directors' fees, taking into account the interests of shareholders and the performance of the Company, and will take responsibility for determining appropriate remuneration for the Directors. # The remuneration policy Of the Directors who served during the year, as listed on page 5 of the Director's Report, there were the following agreements in place. An agreement with Mr Presland, pursuant to which Mr Presland was appointed as a non-executive director and chairman of the Company for an annual fee of £18,000, payable monthly in arrears. The appointment is for an initial term of 36 months and is terminable on six months' notice on either side. No compensation is payable for loss of office and the appointment may be terminated immediately if, among other things, Mr Presland is in material breach of the terms of the appointment. An agreement with Mr Disspain, pursuant to which Mr Disspain was appointed as a non-executive director of the Company for an annual fee of £18,000, payable monthly in arrears. The appointment is for an initial term of 36 months and is terminable on six months' notice on either side. No compensation is payable for loss of office and the appointment may be terminated immediately if, among other things, Mr Disspain is in material breach of the terms of the appointment. An agreement with Mr Drummond, pursuant to which Mr Drummond was appointed as a non-executive director of the Company, initially for an annual fee of £18,000, which may be settled in Ordinary Shares. The appointment is for an initial term of 36 months and is terminable on six months' notice on either side. No compensation is payable for loss of office and the appointment may be terminated immediately if, among other things, Mr Drummond is in material breach of the terms of the appointment. An agreement with Mr Smart, pursuant to which Mr Smart was appointed as a non-executive director of the Company, initially Mr Smart will not be remunerated. The appointment is for an initial term of 36 months and is terminable on six months' notice on either side. No compensation is payable for loss of office and the appointment may be terminated immediately if, among other things, Mr Smart is in material breach of the terms of the appointment. # Company performance graph The Directors have considered the requirement for a performance graph comparing the Company's Total Shareholder Return with that of a comparable indicator. The Directors do not currently consider that including the graph will be meaningful because Company has only become listed in the current period and is currently incurring losses as it seeks a suitable acquisition target. In addition the remuneration of the Directors is not currently linked to performance and therefore we do not consider the inclusion of a performance graph will be useful to the shareholders at the current time. # Statement of Directors' shareholding and share interests (audited) Of the Directors, as listed on page 5 of the Director Report, who served during the year, those with an interest in the Ordinary Shares of the Company, either directly in their name or indirectly through a nominee company, are as follows: Page 8 # ASHINGTON INNOVATION PLC # DIRECTORS REMUNERATION REPORT (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023 | Shareholder | Number of Ordinary Shares | Percentage of Issued Share Capital | | --- | --- | --- | | Mr Jason Smart | 29,731,233 | 47.50% | | Mr Jason Drummond (resigned 15-08-2023) | 1,000,000 | 1.60% | | Mr Christopher Disspain (resigned 08-11-2023) | 1,000,000 | 1.60% | | Mr Grant Duthie (appointed 12-10-2023) | 833,333 | 1.33% | | Mr Peter Presland | 166,697 | 0.27% | There have been no changes in the Directors' share interests since the period end. Jason Drummond was issued 1,200,000 additional Ordinary shares following his resignation on 15 August 2023. # Directors' emoluments (audited) Remuneration paid to Directors' during the 17 month period ended 31 December 2023 was as follows; | Director | Salary £ | Fees £ | Pension contribution £ | Share based payments £ * | Payment in lieu of notice £ | Total £ | | --- | --- | --- | --- | --- | --- | --- | | Jason Smart | | | | £184,770 | | £184,770 | | Peter Presland | £24,000 | £3,000 | | £1,400 | | £28,400 | | Chris Disspain | | | £22,500 | £1,400 | | £23,900 | | Jason Drummond | | £27,000 | | - | £9,000 | £36,000 | | TOTAL | £24,000 | £30,000 | £22,500 | £187,570 | £9,000 | £273,070 | Remuneration paid to Directors' during the 12 month year ended 31 July 2022 was as follows; | Director | Salary £ | Fees £ | Pension contribution £ | Payment in lieu of notice £ | Total £ | | --- | --- | --- | --- | --- | --- | | Peter Presland | £10,500 | £5,000 | | | £15,500 | | Chris Disspain | | £5,000 | £10,500 | | £15,500 | | Jason Drummond | | £30,000 | | | £30,000 | | TOTAL | £10,500 | £40,000 | £10,500 | - | £61,000 | The nature of the fees paid to Directors in respect of the current period and prior year are disclosed within Note 16 – Related Party Transactions. *Share based payments relating to the vesting amount charged to profit and loss in respect of warrants and options issued or committed as at the time of the Listing was £195,851. This included share based payments to Directors of £187,570 and share based payment to the Senior Manager of £8,681. None of the Directors have any commission or profit-sharing arrangements with the Company. There are no other reportable matters to disclose. Page 9 # ASHINGTON INNOVATION PLC # DIRECTORS REMUNERATION REPORT (CONTINUED) # FOR THE PERIOD ENDED 31 DECEMBER 2023 # Approval by shareholders At the next annual general meeting of the Company a resolution approving this report is to be proposed as an ordinary resolution. The Board considers shareholder feedback received which will be reviewed and considered as part of the Company's annual policy on remuneration. This report was approved by the board and signed on its behalf. Peter Presland Peter Presland (Apr 30, 2024 16:04 GMT+1) P E Presland Director Date 30/04/2024 Page 10 # ASHINGTON INNOVATION PLC # DIRECTORS RESPONSIBILITIES STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2023 The Directors are responsible for preparing the strategic report, directors' report and the financial statements, in accordance with applicable law. Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK adopted International Financial Reporting Standards (UK adopted IFRS). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the Directors are required to: - select suitable accounting policies and then apply them consistently; make judgments and estimates that are reasonable and prudent; state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements; assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and - use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. Page 11 # ASHINGTON INNOVATION PLC # INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ASHINGTON INNOVATION PLC For the purpose of this report, the terms "we" and "our" denote MHA in relation to UK legal, professional and regulatory responsibilities and reporting obligations to the members of Ashington Innovation Plc. For the purposes of the table on pages 13 to 14 that sets out the key audit matters and how our audit addressed the key audit matters, the terms "we" and "our" refer to MHA. The "Company" is defined as Ashington Innovation Plc. The relevant legislation governing the Company is the United Kingdom Companies Act 2006 ("Companies Act 2006"). # Opinion We have audited the financial statements of Ashington Innovation Plc for the period ended 31 December 2023. The financial statements that we have audited comprise: the Statement of Comprehensive Income the Statement of Financial Position the Statement of Changes in Equity the Statement of Cash Flows, and Notes 1 to 17 of the financial statements, including significant accounting policies. The financial reporting framework that has been applied in the preparation of the company's financial statements is applicable law and International Financial Reporting Standards, International Accounting Standards and interpretations as adopted by the UK (collectively UK adopted IFRS). In our opinion the financial statements: - give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of the Company's loss for the period then ended; have been properly prepared in accordance with UK adopted IFRS; and have been prepared in accordance with the requirements of the Companies Act 2006. Our opinion is consistent with our reporting to the Audit Committee. # Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our ethical responsibilities in accordance with those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. # Material uncertainty related to going concern We draw attention to note 2.2 in the financial statements, which indicates that further funding is required under the Company's long-term plan to continue to seek acquisition candidates, and the Company plans to raise significant further equity capital within this period, either from existing or new investors. The necessary investment by existing and new shareholders, and the successful completion of a suitable acquisition are both matters that are not entirely within the control of the Directors as stated within note 2.2 and represent material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter. In auditing the financial statements, we have concluded that the Directors' use of the going basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included: The consideration of inherent risks to the Company's operations and specifically its business model. The evaluation of how those risks might impact on the Company's available financial resources. Page 12 # ASHINGTON INNOVATION PLC # INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ASHINGTON INNOVATION PLC (CONTINUED) - Where additional resources may be required, the reasonableness and practicality of the assumptions made by the Directors when assessing the probability and likelihood of those resources becoming available. - Liquidity considerations including examination of the Company's cash flow projections. - Viability assessment including consideration of reserve levels and business plans. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. # Overview of our audit approach | Scope | Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company's system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the directors that may have represented a risk of material misstatement. | | | | --- | --- | --- | --- | | Materiality | 2023 | 2022 | | | Company | £6,800 | £2,863 | 2% of gross assets in both periods | | Key audit matters | | | | | Recurring | Management override of controls | | | # Key Audit Matters Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those matters which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. | Management override of controls | | | --- | --- | | Key audit matter description | Management is in a unique position to perpetrate fraud because of management's ability to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively. Due to the unpredictable way in which such override could occur, this was deemed a significant risk and, due to the limited activity during the year, also a key audit matter for this engagement. | Page 13 # ASHINGTON INNOVATION PLC # INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ASHINGTON INNOVATION PLC (CONTINUED) | **How the scope of our audit responded to the** | Our audit procedures included: We performed detailed reviews and testing of journal entries made, particularly those considered to rely on greater levels of judgement, such as year-end estimations. Disclosure - We tested the basis of accounting estimates used to populate disclosures of a subjective nature, such as year-end accruals, to understand the judgments made and assessed the adequacy of disclosures for compliance with the accounting standards and regulatory considerations. | | --- | --- | | **Key observations communicated to the Company's Audit Committee** | The results of our testing were satisfactory, and we considered that entries made into the accounting system and subsequent disclosure made into the financial statements were deemed to have an appropriate supporting basis and there was no indication of any management bias. | # Our application of materiality Our definition of materiality considers the value of error or omission on the financial statements that, individually or in aggregate, would change or influence the economic decision of a reasonably knowledgeable user of those financial statements. Misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Materiality is used in planning the scope of our work, executing that work and evaluating the results. Materiality in respect of the Company was set at £6,800 (2022: £2,863) which was determined on the basis of 2% of the Company's gross assets (2022: 2% of the Company's gross assets). This was deemed to be the appropriate benchmark for the calculation of materiality as this is a key area of the financial statements with which the users of the financial statements are principally concerned. Performance materiality is the application of materiality at the individual account or balance level, set at an amount to reduce, to an appropriately low level, the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. Performance materiality for the Company was set at £4,760 (2022: £2,147) which represents 70% (2022: 75%) of the above materiality levels. The determination of performance materiality reflects our assessment of the risk of undetected errors existing, the nature of the systems and controls and the level of misstatements arising in previous audits. We agreed to report any corrected or uncorrected adjustments exceeding £340 (2022: £29) to the Board of Directors as well as differences below this threshold that in our view warranted reporting on qualitative grounds. # The control environment We evaluated the design and implementation of those internal controls of the company which are relevant to our audit, such as those relating to the financial reporting cycle. # Climate-related risks In planning our audit and gaining an understanding of the company, we considered the potential impact of climate-related risks on the business and its financial statements. We obtained management's climate-related risk assessment, along with relevant documentation relating to management's assessment and held Page 14 # ASHINGTON INNOVATION PLC # INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ASHINGTON INNOVATION PLC (CONTINUED) discussions with management to understand their process for identifying and assessing those risks. We critically reviewed management's assessment and challenged the assumptions underlying their assessment. We have agreed with managements' assessment that climate-related risks are not material to these financial statements. # Reporting on other information The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. # Strategic report and directors report In our opinion, based on the work undertaken in the course of the audit: - the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and - the strategic report and the directors' report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Company and its environment obtained during the audit, we have not identified material misstatements in the strategic report or the directors' report. # Directors' remuneration report Those aspects of the director's remuneration report which are required to be audited have been prepared in accordance with applicable legal requirements. # Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received by branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - the part of the directors' remuneration report to be audited is not in agreement with the accounting records and returns; or we have not received all the information and explanations we require for our audit. # Responsibilities of directors As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company's ability to Page 15 # ASHINGTON INNOVATION PLC # INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ASHINGTON INNOVATION PLC (CONTINUED) continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. # Auditor responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. # Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it. # Identifying and assessing potential risks arising from irregularities, including fraud The extent of the procedures undertaken to identify and assess the risks of material misstatement in respect of irregularities, including fraud, included the following: - We considered the nature of the industry and sector the control environment, business performance including remuneration policies and the Company's own risk assessment that irregularities might occur as a result of fraud or error. From our sector experience and through discussion with the directors, we obtained an understanding of the legal and regulatory frameworks applicable to the Company focusing on laws and regulations that could reasonably be expected to have a direct material effect on the financial statements, such as provisions of the Companies Act 2006, listing rules and UK tax legislation. - We enquired of the directors and management concerning the Company's policies and procedures relating to: - identifying, evaluating and complying with the laws and regulations and whether they were aware of any instances of non-compliance; - detecting and responding to the risks of fraud and whether they had any knowledge of actual or suspected fraud; and - the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. - We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur by evaluating management's incentives and opportunities for manipulation of the financial statements. This included utilising the spectrum of inherent risk and an evaluation of the risk of management override of controls. Page 16 # ASHINGTON INNOVATION PLC # INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ASHINGTON INNOVATION PLC (CONTINUED) # Audit response to risks identified In respect of the above procedures: we corroborated the results of our enquiries through our review of the minutes of the Company's Board meetings; audit procedures performed by the engagement team in connection with the risks identified included: - reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations expected to have a direct impact on the financial statements. - testing journal entries, including those processed late for financial statements preparation, those posted by infrequent or unexpected users, those posted to unusual account combinations; - evaluating the business rationale of significant transactions outside the normal course of business, and reviewing accounting estimates for bias; - enquiry of management around actual and potential litigation and claims. - challenging the assumptions and judgements made by management in its significant accounting estimates; and - obtaining confirmations from third parties to confirm existence of a sample of balances. - we communicated relevant laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. # Other requirements We were appointed by the Directors on 7 December 2023 and the current period is the first year of our engagement. We did not provide any non-audit services which are prohibited by the FRC's Ethical Standard to the Company, and we remain independent of the company in conducting our audit. # Use of our report This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these financial statements form part of the European Single Electronic Format (ESEF) prepared Annual Financial Report filed on the National Storage Mechanism of the UK FCA in accordance with the ESEF Regulatory Technical Standard ((ESEF RTS)). This auditor's report provides no assurance over whether the annual financial report has been prepared using the single electronic format specified in the ESEF RTS. Jason Mitchell MBA BSc FCA (Senior Statutory Auditor) for and on behalf of MHA, Statutory Auditor Maidenhead, United Kingdom Jason Mitchell Jason Mitchell (Apr 30, 2024 16:12 GMT+1) 30 April 2024 MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313) Page 17 # ASHINGTON INNOVATION PLC # STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 DECEMBER 2023 | | Note | 17 months ended 31 December 2023 £ | 12 months ended 31 July 2022 £ | | --- | --- | --- | --- | | Administrative expenses | | (878,218) | (381,450) | | Loss from operations | | (878,218) | (381,450) | | Loss before tax | | (878,218) | (381,450) | | Tax expense | 6 | - | - | | Loss for the period | | (878,218) | (381,450) | | Total comprehensive income | | (878,218) | (381,450) | | | | Period ended 31 December 2023 Pence | Year ended 31 July 2022 Pence | | Basic and diluted loss per share | 7 | (1.40p) | (1.11p) | There is no other comprehensive income. The loss for the period is the same as the total comprehensive income for the period attributable to the owners of the Company. The notes on pages 22 to 34 form part of these financial statements. Page 18 # **ASHINGTON INNOVATION PLC** **REGISTERED NUMBER: 12758732** # **STATEMENT OF FINANCIAL POSITION** **AS AT 31 DECEMBER 2023** | | Note | 31 December 2023 £ | 31 July 2022 £ | At transition to IFRS 1 August 2021 £ | | --- | --- | --- | --- | --- | | **Assets** | | | | | | **Current assets** | | | | | | Trade and other receivables | 8 | 21,969 | 6,600 | 200 | | Cash and cash equivalents | 15 | 323,146 | 136,553 | 71,200 | | **Total assets** | | **345,115** | **143,153** | **71,400** | | **Liabilities** | | | | | | **Current liabilities** | | | | | | Trade and other payables | 9 | 176,662 | 126,810 | 68,607 | | **Total liabilities** | | **176,662** | **126,810** | **68,607** | | **Net assets** | | **168,453** | **16,343** | **2,793** | | **Issued capital and reserves** | | | | | | Share capital | 10 | 625,979 | 344,167 | 212,500 | | Share premium reserve | 11 | 815,998 | 263,333 | - | | Retained earnings | | (1,273,524) | (591,157) | (209,707) | | **TOTAL EQUITY** | | **168,453** | **16,343** | **2,793** | The financial statements on pages 18 to 34 were approved and authorised for issue by the board of directors and were signed on its behalf by: **P E Presland** Director Date: The notes on pages 22 to 34 form part of these financial statements. Page 19 # ---**ASHINGTON INNOVATION PLC** **STATEMENT OF CHANGES IN EQUITY** **FOR THE PERIOD ENDED 31 DECEMBER 2023**--- | | Share capital £ | Share premium £ | Retained earnings £ | Total equity £ | | --- | --- | --- | --- | --- | | **At 1 August 2021** | 212,500 | - | (209,707) | 2,793 | | **Comprehensive income for the period** | | | | | | Loss for the year | - | - | (381,450) | (381,450) | | **Contributions by and distributions to owners** | | | | | | Issue of share capital (see Note 10) | 131,667 | 263,333 | - | 395,000 | | **At 1 August 2022** | **344,167** | **263,333** | **(591,157)** | **16,343** | | **Comprehensive income for the period** | | | | | | Loss for the period | - | - | (878,218) | (878,218) | | **Contributions by and distributions to owners** | | | | | | Issue of share capital, net of transaction costs (see Note 10 and Note 11) | 281,812 | 552,665 | - | 834,477 | | Share based payments | - | - | 195,851 | 195,851 | | **At 31 December 2023** | **625,979** | **815,998** | **(1,273,524)** | **168,453** | The notes on pages 22 to 34 form part of these financial statements. ---Page 20 # ---**ASHINGTON INNOVATION PLC** **STATEMENT OF CASH FLOWS** **FOR THE PERIOD ENDED 31 DECEMBER 2023**--- | | Note | 31 December 2023 £ | 31 July 2022 £ | | --- | --- | --- | --- | | **Cash flows from operating activities** | | | | | Loss for the period | | (878,218) | (381,450) | | **Adjustments for** | | | | | Share based payments | | 195,851 | - | | **Movements in working capital:** | | | | | Increase in trade and other receivables | | (15,369) | (6,400) | | Increase in trade and other payables | | 16,852 | 58,203 | | **Net cash used in operating activities** | | (631,884) | (329,647) | | **Cash flows from financing activities** | | | | | Issue of ordinary shares | | 818,477 | 395,000 | | **Net cash from financing activities** | | 818,477 | 395,000 | | **Net increase in cash and cash equivalents** | | 186,593 | 65,353 | | Cash and cash equivalents at the beginning of period | | 136,553 | 71,200 | | **Cash and cash equivalents at the end of the period** | 15 | 323,146 | 136,553 | The notes on pages 22 to 34 form part of these financial statements. ---Page 21 # ---**ASHINGTON INNOVATION PLC** **NOTES TO THE FINANCIAL STATEMENTS** **FOR THE PERIOD ENDED 31 DECEMBER 2023**--- # **1. General Information** Ashington Innovation PLC (the 'Company') is a public company incorporated and domiciled in the United Kingdom. The Company's registered office is at 27/28 Eastcastle Street, London, W1W 8DH. The Company's principal activity is that of a Special Purpose Acquisition Company. The accounting period is 17 months to 31 December 2023. The period end was extended to fall in line with the calendar year. These financial statements are presented in pound sterling, which is the Company's functional currency. All amounts have been rounded to the nearest pound, unless otherwise indicated. # **2. Material Accounting policies** # **2.1 Basis of preparation** The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively UK adopted IFRS) and those parts of the Companies Act 2006 that are relevant to companies reporting in accordance with UK adopted IFRS. The financial statements have been prepared under the historical cost convention unless otherwise specified within the accounting policies. Before the transition to International Financial Reporting Standards (IFRS) on 01 August 2022, the Company had previously prepared the Financial Statements in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The policies under the entity's previous accounting framework are not materially different to IFRS and have not impacted the statement of comprehensive income, the statements of financial position or the statements of cash flows. In preparing the financial statements, management made judgments, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. The Directors do not consider there to be any critical judgements that have been made in arriving at the amounts recognised in the financial statements. # **2.2 Going concern** The Company was established as a Special Purpose Acquisition Company and although the Company is unlikely to make any profit until the successful completion of a suitable acquisition the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and for this reason will continue to adopt the going concern basis in the preparation of its financial statements. ---Page 22 # ASHINGTON INNOVATION PLC # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023 In undertaking the going concern review, the Directors have reviewed the Company's cash flow forecasts to 30 April 2025 (the going concern period). Accounting standards require that the review period covers at least 12 months from the date of approval of the financial statements, although they do not specify how far beyond 12 months the Directors should consider. Further funding is required under the Company's long-term plan to continue to seek acquisition candidates, and the Company plans to raise significant further equity capital within this period, either from existing or new investors. Given these plans and requirements, a review period of 12 months is considered appropriate. The necessary investment by existing and new shareholders, and the successful completion of a suitable acquisition are both matters that are not entirely within the control of the Directors, and represent material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern. Notwithstanding the existence of these material uncertainties, given the plans currently in place, the Directors believe that the adoption of the going concern basis of accounting is appropriate. The accompanying financial statements do not include any adjustments that would be required if they were not prepared on a going concern basis. # 2.3 Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. # (i) Current tax There is no tax payable as the Company has made a taxable loss for the period. Taxable loss differs from 'Loss for the period' as reported in the statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. # (ii) Deferred tax Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Page 23 # ASHINGTON INNOVATION PLC # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023 # (iii) Current and deferred tax for the period Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. # 2.4 Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. # 2.5 Financial instruments Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Financial liabilities including trade and other payables are non-interest bearing and carried at the original invoice amount. Trade payables represent obligations to pay for services that have been provided in the ordinary course of business. All financial liabilities approximate to fair value due to the short-term nature of the financial instruments. # 2.6 Defined contribution schemes Contributions to defined contribution pension schemes are charged to the statement of comprehensive income in the period to which they relate. # 2.7 Share Capital and Share Premium Ordinary shares are classified as equity and are carried at par value. Share premium represents the excess money received for issued shares above the par value, net of transaction costs. # 2.8 Retained Earnings Retained earnings are classified as equity and represent the accumulated earned capital of the Company. # 2.9 Share-based payments The Company has issued warrants to initial investors and certain counter parties and advisers. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market Page 24 # ASHINGTON INNOVATION PLC # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023 based vesting conditions) at the date of the grant, equating to the end date the company and counterparty had a shared understanding of the items and conditions of the agreement. The fair value so determined is expensed on a straight line basis over the vesting period, based on the Company's estimate of the number of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions. # 2.10 Recently released Standards / Interpretations Ashington Innovation has resolved not to early adopt new or revised standards and interpretations with an effective date after the date of these financial statements. The Company intends to adopt these standards as soon as they become effective. # Effective 01 January 2024 - IFRS 16 Amendments to clarify how a seller-lessee subsequently measures sale and leaseback transactions - IFRS17 Financial Instruments: Disclosure Amendments regarding supplier finance arrangements - IAS 1 Amendments regarding the classification of debt with covenants The Directors do not anticipate that the adoption of these new or revised standards and interpretations will have a material impact on the Company's financial statements in the period of initial application. # 3. Auditors' remuneration During the period, the Company obtained the following services from the Company's auditors: | | Period ended 31 December 2023 £ | Year ended 31 July 2022 £ | | --- | --- | --- | | Fees payable to the Company's auditors for the audit of the Company's financial statements | 27,600 | 3,600 | Fees payable to the Company's auditors in respect of all non-audit services not included above were £nil (2022: £6,060). Page 25 # ASHINGTON INNOVATION PLC # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023 # 4. Employee benefit expenses | | Period ended 31 December 2023 £ | Year ended 31 July 2022 £ | | --- | --- | --- | | Employee benefit expenses (including directors) comprise: | | | | Wages and salaries | 24,000 | 10,500 | | National insurance | 1,770 | 447 | | Share based payments * | 187,570 | - | | Defined contribution pension cost | 22,500 | 10,500 | | | 235,840 | 21,447 | * Additional share based payments were made to a senior manager, who was not an employee, of £8,281 to give total share based payments of £195,851 as included in the table below. # Key management personnel compensation Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including the Directors of the Company listed on page 5. | | Period ended 31 December 2023 £ | Year ended 31 July 2022 £ | | --- | --- | --- | | Salary | 24,000 | 10,500 | | Defined contribution scheme costs | 22,500 | 10,500 | | Share based payments | 195,851 | - | | Payment in lieu of notice | 9,000 | - | | | 250,851 | 21,000 | The monthly average number of persons, including the Directors, employed by the Company during the period was as follows: | | Period ended 31 December 2023 No. | Year ended 31 July 2022 No. | | --- | --- | --- | | Directors | 4 | 4 | Page 26 # ASHINGTON INNOVATION PLC # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023 # 5. Directors' remuneration | | 31 December 2023 £ | 31 July 2022 £ | | --- | --- | --- | | Directors' emoluments | 54,000 | 50,500 | | Company contributions to pension schemes | 22,500 | 10,500 | | Payment in lieu of notice | 9,000 | - | | Share based payments | 187,570 | - | | | 273,070 | 61,000 | During the period, retirement benefits were accruing to 1 (2022: 1) director in respect of qualifying services: Directors' emoluments include salary and fees paid to Directors which are detailed in Note 16 as related party transactions. A breakdown of the remuneration paid to each Director who served during the period is included within the Directors Remuneration Report on page 9, which also provides details of share based payments. # 6. Tax expense The reasons for the difference between the actual tax charge for the period and the standard rate of corporation tax in the United Kingdom applied to losses for the period are as follows: | | Period ended 31 December 2023 £ | Year ended 31 July 2022 £ | | --- | --- | --- | | Loss for the period | (878,218) | (381,450) | | Loss before income taxes | (878,218) | (381,450) | | Tax using the Company's domestic tax rate of 22.18% (2022:19%) | (194,789) | (72,476) | | Expenses not deductible for tax purposes | 43,539 | - | | Unrelieved tax losses carried forward | 151,250 | 72,476 | | Total current tax expense for the period | - | - | Page 27 # ---**ASHINGTON INNOVATION PLC** # **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023** No liability to UK corporation tax arose on the ordinary activities for the current period. The Company has estimated excess management expenses of £1,272,326 (2022: £590,407) available for carry forward against future trading profits. The tax losses have resulted in a deferred tax asset at a rate of 25% (2022: 19%) of approximately £318,082 (2022: £72,476) which has not been recognised in the financial statements due to the uncertainty of the recoverability of the amount. # **Changes in tax rates and factors affecting the future tax charges** There were no factors that may affect future tax charges. # **7. Earnings per share** # **Basic earnings per share** Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of Ordinary shares in issue during the period: | | Period ended 31 December 2023 | Year ended 31 July 2022 | | --- | --- | --- | | Loss after tax attributable to equity holders of the Company | (£878,218) | (£381,450) | | Weighted average number of shares | 62,597,897 | 34,416,665 | | Weighted average number of Ordinary shares on a diluted basis | 62,597,897 | 34,416,665 | | Basic loss per share | (1.40p) | (1.11p) | For the financial period ended 31 December 2023 and the year ended 31 July 2022, basic loss per share and diluted loss per share are the same due to the effect of warrants and options being non-dilutive in light of the loss per share. ---Page 28 # ---**ASHINGTON INNOVATION PLC** # **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023**--- # **8. Trade and other receivables** | | 31 December 2023 £ | 31 July 2022 £ | | --- | --- | --- | | **Current** | | | | Prepayments and accrued income | 21,969 | 6,600 | | **Total current trade and other receivables** | **21,969** | **6,600** | # **9. Trade and other payables** | | 31 December 2023 £ | 31 July 2022 £ | | --- | --- | --- | | **Current** | | | | Trade payables | 103,267 | 9,258 | | Other payables | 29,030 | 9,437 | | Accruals | 44,365 | 107,328 | | **Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost** | **176,662** | **126,023** | | Other payables - tax and social security payments | - | 787 | | **Total current trade and other payables** | **176,662** | **126,810** | Other payables consist of transactions with related parties which are disclosed in detail in Note 15. ---Page 29 # ASHINGTON INNOVATION PLC # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023 # 10. Share capital Issued and fully paid | | 31 December 2023 Number | 31 December 2023 £ | 31 July 2022 Number | 31 July 2022 £ | | --- | --- | --- | --- | --- | | Ordinary shares of £0.01 each | | | | | | At start of the period | 34,416,665 | 344,167 | 21,250,000 | 212,500 | | Issued in the year | 28,181,232 | 281,812 | 13,166,665 | 131,667 | | | 62,597,897 | 625,979 | 34,416,665 | 344,167 | # At end of the period During the period there were two new share issues. 26,981,232 Ordinary £0.01 shares were issued on 6 June 2023 and £0.03 was paid per share. 1,200,000 Ordinary £0.01 shares were issued on 8 December 2023 and £0.03 was paid per share. The Ordinary Shares have attached to them full voting, dividend and capital distribution (including on winding up) rights, they do not confer any rights of redemption. # 11. Reserves # Share premium A premium of £563,625 was paid on shares issued during the period, and after directly attributable costs of the share issuance of £10,960 were deducted there was a share premium for the period of £552,665. At the Balance Sheet date the total cumulative share premium was £815,998. # Retained earnings All reserves in respect of profit and loss are distributable reserves. Page 30 # ---**ASHINGTON INNOVATION PLC** # **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023**--- # **12. Financial instruments - fair values and risk management** # **Accounting classifications and fair values** The following table shows the carrying amounts of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount approximates to fair value. | | 31 December 2023 £ | 31 July 2022 £ | | --- | --- | --- | | **Financial assets not measured at fair value** | | | | Trade and other receivables | 21,969 | 6,000 | | Cash and cash equivalents | 323,146 | 136,553 | | | 345,115 | 142,553 | | **Financial liabilities not measured at fair value** | | | | Trade payables | 103,267 | 9,258 | | | 103,267 | 9,258 | ---Page 31 # ASHINGTON INNOVATION PLC # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023 # Financial Assets and Liabilities Financial assets and liabilities are recognised on the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument. # Financial risk management objectives The Company's activities expose it to liquidity risk. Management carefully reviews liquid assets in the short term through closely monitoring costs. There are no borrowing facilities in place that require repayment reducing interest rate risk exposure. # Credit Risk The Company will only trade with third parties it recognises as being creditworthy. There are no trade receivable balances at the balance sheet date, but the Company will closely monitor any future receivable balances to ensure such balances are fairly stated. # Market risk The Company's overall risk management programme considers the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial performance. # Liquidity risk The Company has no borrowing that exposes it to liquidity risk. Management closely monitors liquid assets in the short term through the control and review of all costs. No maturity analysis has been prepared because there are no contractual maturities and all trade payables will be due for payment within supplier credit terms of 3 months or less. # Fair Values of Financial Assets and Liabilities The Directors consider that the fair value of the Company's financial assets and liabilities are not considered to be materially different from their book values. # 13. Controlling party As at 31 December 2023 there is no ultimate controlling party. Page 32 # ---**ASHINGTON INNOVATION PLC** # **NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023**--- # **14. Warrants** On 31 May 2023 the Company entered into an arrangement to issue warrants to the Directors and the Senior Manager of the company. These warrants will entitle the Directors and the Senior Manager to subscribe, following (and conditional upon) completion of an acquisition, for such a number of Ordinary Shares as is equal, in aggregate, to 5% of the number of new Ordinary Shares to be issued as consideration shares pursuant to the acquisition at a subscription price of £0.03 per share. These warrants will be exercisable for a period of two years from the date of completion of the acquisition. At the date of the warrant instrument being issued, the number of consideration shares that will be issued following an acquisition is unknown and therefore the number of shares subject to the warrants is unknown. The timing of an acquisition is also unknown and therefore the expiry date of the warrants is unknown. It is therefore not possible to disclose the number of warrants outstanding or exercisable at the beginning nor end of the period nor the weighted average remaining contractual life. No warrants were forfeited, expired nor were exercised during the period. As the warrants are to be settled in ordinary shares of the company they have been accounted for as an equity settled share-based payment in line with IFRS2. Given the number of unknown factors outlined above, the fair value of warrants was determined by applying a Monte-Carlo simulation. The share-based payment charge for the warrants has been taken in full at the date of the warrant instrument being signed as there are no vesting conditions specified within the warrant instrument. A Monte Carlo simulation requires a number of assumptions to be made. The key assumptions made to input into the Monte-Carlo simulation in respect of the warrants are as follows: | Number of shares in issue at 31 May 2023 | 61,397,900 | | --- | --- | | Period in which a acquisition is expected to occur | 2 years | | Probability of an acquisition within 2 years | 66.67% | | Minimum size of an acquisition | £30,000,000 | | Maximum size of an acquisition | £80,000,000 | | Probability distribution of the acquisition size | Exponential | | Number of warrant shares issued to satisfy the warrants | 58,328,005 | The Company recognised £195,851 of expenditure related to the warrants in the period. ---Page 33 # ASHINGTON INNOVATION PLC # NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 DECEMBER 2023 # 15. Notes supporting statement of cash flows | | 31 December 2023 £ | 31 July 2022 £ | | --- | --- | --- | | Cash at bank available on demand | 323,146 | 136,553 | | Cash and cash equivalents in the statement of financial position | 323,146 | 136,553 | | Cash and cash equivalents in the statement of cash flows | 323,146 | 136,553 | # 16. Related Party Transactions Salaries and pensions paid to Directors during the period were as follows: Peter Presland £24,000 (2022: £10,500) Christopher Disspain £22,500 (2022: £10,500) Consultancy fees paid to Directors were as follows: Christopher Disspain £nil (2022: £5,000) Jason Drummond £36,000 (2022: £30,000) During the year the Company outsourced its administration service to Mainvalley Limited, a Company owned and controlled by Peter Presland. Mainvalley Limited charged the Company £3,000 (2022: £5,000 for consultancy) for these administration services. At the Balance Sheet date, included within other creditors, was an amount owed of £29,030 (2022: £9,437) to Jason Smart, a Director of the Company. No interest was charged on the loan to the Company. Share based payments made to the Directors during the period ended 31 December 2023 are disclosed in the Directors Remuneration Report on page 9. # 17. Capital management and commitments The Directors' objectives in capital management are to safeguard the Company's ability to continue as a going concern in order to provide returns for the shareholders and to maintain an optimal capital structure in order to reduce the cost of capital. At the balance sheet date, the Company had been financed by the introduction of capital as it was in the previous period. In the future the expected capital structure of the Company is expected to consist of borrowings and equity attributable to equity holders of the Company. The Company is not currently subject to any externally imposed capital requirements. There was no capital expenditure contracted for at the end of the reporting period but not yet incurred. Page 34